GENERAL COMMENTS:
The hype that fueled cattle contracts last week isn't over. Upon seeing how packers committed the cattle they bought last week, it's safe to say this week's cash market stands a chance at demanding more money. The lean hog market hasn't found a clear indication as to where it intends to go as pork cutout values chop sideways in a volatile manner. December corn is down 1 1/2 cents per bushel and December soybean meal is down $0.50. The Dow Jones Industrial Average is up 58.84 points and NASDAQ is up 12.64 points.
LIVE CATTLE:
Last week's cash cattle trade was absolutely invigorating as the market successfully traded fats for $130, which comes as a $2.00 to $5.00 gain from the previous week. And upon seeing how many cattle were committed for the nearby delivery as oppose to the deferred delivery, the market sits in glorious position to continue to demand higher prices as showlists are mixed and beef demand remains strong. So long as demand can continue to shine and keep packers interested in running swift chain speeds, the market stands a good chance at keeping this rally well underway. Traders are fully supporting the cattle market's rally as the market's fundamentals haven't been this strong in a long, long time. December live cattle are up $0.52 at $132.32, February live cattle are up $0.42 at $137.55 and April live cattle are up $0.50 at $140.50. New showlists appear to be mixed, higher in Nebraska/Colorado, somewhat higher in Texas, but lower in Kansas.
Last week's negotiated cash cattle traded totaled 96,867 head. Of that, 90% (87,369 head) were scheduled for the nearby delivery, while the remaining 10% (9,498 head) were scheduled for the deferred delivery in the following 15 to 30 days.
Boxed beef prices are mixed: choice down $0.65 ($288.89) and select up $0.95 ($268.47) with a movement of 46 loads (18.98 loads of choice, 7.30 loads of select, 11.31 loads of trim and 8.04 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures are mostly on the gain Monday morning other than in the spot November contract which is less than 10 days away from expiring, so traders are moving their position. November feeders are down $0.37 at $158.50, January feeders are up $0.55 at $160.15 and March feeders are up $0.55 at $161.32. Throughout the countryside buyers are optimistic about the cattle market as most fully understand 2022 has the potential to be a strong year given that many producers have been forced to liquate for one reason or another this past year; on the backside of every liquation phase comes the buy-back cycle. If the corn market continues to trail lower and live cattle market keeps with its rally, feeder cattle contracts stand a good chance at rallying as well.
LEAN HOGS:
The lean hog complex isn't barreling overconfidently into Monday's market as traders, hog producers and everyone in between tries to make sense of this market. December lean hogs are down $0.30 at $76.22, February lean hogs are down $0.17 at $79.30 and April lean hogs are down $0.02 at $83.80. After last week's whirlwind in the pork cutout, watching for any clues this week as to where pork cutout values intend to head is crucial. Yes, pork demand will see some strong buying from now through mid-December as consumers stock their freezers for holiday get togethers, but equally important to note is that, with slower processing speeds and limited labor, supplies will continue to back up. Seeing the morning's pork cutout up $7.26 could mean the market is in for another wild ride. But before any sensible conclusions can be drawn, we need to wait for the afternoon's cutout close.
The projected CME Lean Hog Index for 11/5/2021 is up $0.60 at $79.29, and the actual index for 11/4/2021 is up $0.37 at $78.69. Hog prices are higher on the National Direct Morning Hog Report, up $0.12 with a weighted average of $58.76, ranging from $58.00 to $60.00 on 5,689 head and a five-day rolling average of $59.70. Pork cutouts total 175.09 loads with 156.90 load of pork cuts and 18.20 loads of trim. Pork cutout values: up $7.26, $103.61.
In planning for the holiday season and what may come with the new year, make plans to attend the 2022 DTN Ag Summit, December 5-7 in Chicago! Visit www.dtn.com/agsummit for more details about the summit and to register. Register before Nov. 26 for the early bird rate.
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